The stock market may have staged a remarkable turnaround and be trading near record levels, but the bears know that the underlying fundamentals are very weak. While there is no single indicator that proves a bear market is on the way, there is a raft of data that, taken together, suggests we are already in one. That said, there are numerous ways for investors to profit during a bear market.

Markets Bearish Despite S&P 500 Being Near Record Levels

The S&P 500 may still be trading near record levels, but stock market bears know that it’s not because of strong earnings and revenue growth. Stocks are being supported by the Federal Reserve’s artificially low interest rates and aggressive corporate share repurchase programs. If investors took these two indicators out of the equation and took a long, hard look at the shape of the U.S and global economy, more would fall on the side of the bears.

Case in point, the S&P 500 is only as strong as the stocks that make up the index. And those stocks are not doing well. In fact, we’re in the midst of an earnings recession. The first quarter blended earnings decline for S&P 500 companies was -7.1%. This is the first time the S&P 500 has reported four consecutive quarters of year-over-year declines in earnings since 2008.1

While analysts expect earnings growth to return in the second half of 2016, they said the same thing last year. S&P 500 companies are reporting disappointing results because the U.S. and global economies remain fragile. And the earnings recession does not look like it’s going to reverse anytime soon.

Bear Market Getting Warmed Up

Again, the S&P 500 may be trading near record levels, but it’s important to note that doesn’t mean the bull market is alive and well. Quite the opposite—the S&P 500 hasn’t reached a new record high since May 2015. It’s in correction mode.

Outside of the current “bull” market, only one other bull market since 1900 has experienced a correction that has lasted longer than one year. On average, a correction within a bull market typically lasts around five months. The longest bull market correction (1990s) lasted 379 days.

Unless the S&P 500 surges miraculously to record levels, for seemingly no reason, in the next week, the 1990s bull market correction will be surpassed by the current one. It’s pretty tough to say the bull market is alive when it’s acting anything but.

Earnings are down and the outlook is bleak. First-quarter GDP was just 0.5%.2 Stocks need a reason to climb higher. And there isn’t one. There is a good reason, though, for stocks to go through a serious correction.

Because of artificially low interest rates, investors have been pouring cash into stocks; there is nowhere else for them to make money. Regardless of what earnings have been, stocks have been climbing higher and higher.

According to the Case Shiller P/E Ratio, the S&P 500 is overvalued by 63%. The ratio is currently at 26.11 (the 10-year average is 16.66). That means that for every $1.00 in earnings a company on the S&P 500 makes, investors are willing to pay $26.11. The ratio has only been higher three times before, in 1929, 2000, and 2007. All three instances were followed by a collapse.3

Learn-To-Trade.com: Toronto’s Leader in Stock Market Trading Courses

Bull and bear markets are part of the cyclical nature of the stock market. Every time there has been a major correction or bear market, the stock market has rebounded. That doesn’t mean the only way for investors to profit is during a bull market.

As the leading provider of stock market trading courses in Canada, Learn-to-Trade.com will teach you proven investing strategies that can help you to profit no matter what direction the markets are heading in.

While others are sitting on the sidelines waiting for the markets to become bullish, you can be making money even as the markets slide. A stock market trading course from Learn-To-Trade.com will teach you the benefits of stock options, stock index trading, futures, futures option trading, Forex (currency) trading, risk management, and capital preservation.

You’ll also discover the benefits of our lifetime membership, where you can re-attend any part of the program you like, as many times as you like. To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at info@learn-to-trade.com.

George Karpouzis is the co-founder of Learn-to-Trade and has been personally providing education and mentoring to over 3000 members since 1999. George has been trading in the stocks, options, futures and forex markets using technical analysis since 1986. With the help of advancements in trading technology the Learn To Trade program is now accessible worldwide. His background and passion for teaching brings an invaluable asset to our members. George is constantly striving to improve the program content and develop new strategic relationships for the benefit of the members. Add me to your G+

Testimonial 3

I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

Steven R

Learn To Trade

4.0

2014-08-20T02:56:18-04:00

Steven R

I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

https://www.learn-to-trade.com/testimonials/testimonial-3/

Joseph L

The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

Joseph L

Learn To Trade

4.0

2014-08-20T10:36:37-04:00

Joseph L

The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

https://www.learn-to-trade.com/testimonials/joseph-l/

Harley S

The course is amazing. Where were you 30 years ago?

Harley S

Learn To Trade

5.0

2014-08-20T10:37:39-04:00

Harley S

The course is amazing. Where were you 30 years ago?

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Partick M

I learned the basics I needed to trade successfully.

Partick M

Learn To Trade

4.0

2014-08-20T10:38:34-04:00

Partick M

I learned the basics I needed to trade successfully.

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Iouri G

I like making money. I’m very happy, so far so good

Iouri G

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4.0

2014-08-20T10:39:27-04:00

Iouri G

I like making money. I’m very happy, so far so good

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Akos B

I learned things it would have taken me years to figure out

Akos B

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2014-08-20T10:40:05-04:00

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I learned things it would have taken me years to figure out

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Robert B

There is always someone ready to answer my questions.

Robert B

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4.0

2014-08-20T10:40:59-04:00

Robert B

There is always someone ready to answer my questions.

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Uldus V

I was impressed with the course’s professionalism and enthusiasm.

Uldus V

Learn To Trade

5.0

2014-08-20T10:41:40-04:00

Uldus V

I was impressed with the course’s professionalism and enthusiasm.

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Dean K

I wish I knew about trading as a business years ago!

Dean K

Learn To Trade

4.0

2014-08-20T10:42:24-04:00

Dean K

I wish I knew about trading as a business years ago!

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Peter P

Learn to Trade provided me with strategy, self-confidence and discipline

Peter P

Learn To Trade

4.0

2014-08-20T10:42:57-04:00

Peter P

Learn to Trade provided me with strategy, self-confidence and discipline

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Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

Shelley P

Learn To Trade

5.0

2014-08-20T10:34:39-04:00

Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

https://www.learn-to-trade.com/testimonials/shelley-p/

Amir

Hi George,

I just wanted to thank you again for the amazing work on the tutorials especially Options trading. Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!

Learn To Trade

5.0

2016-10-07T08:56:52-04:00

Hi George, I just wanted to thank you again for the amazing work on the tutorials especially Options trading. Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!

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Disclaimer: All statements, whether expressed verbally or in writing, are the opinions of Learn-To-Trade.Com Inc., its instructors and/or employees, and are not to be construed as anything more than an opinion. Examples presented are for educational purposes only. There is significant risk in trading financial assets and derivatives. Students / subscribers are responsible for making their own choices and decisions regarding all purchases or sales of stocks or issues. At no time is any stock or issue presented by Learn-To-Trade Inc. and its employees to be construed as a recommendation to buy or sell any stock or issue. Learn-To-Trade Inc. is not a broker or an investment advisor. It is strictly an educational service.